This report examines potential approaches for a comprehensive update to the current methodology for estimating the social cost of carbon dioxide (SC-CO2) for U.S. regulatory analysis. The SC-CO2 is an estimate, in dollars, of the net damages incurred by society from a 1 metric ton increase in carbon dioxide emissions in a given year. As required by executive orders and a court ruling, government agencies use the SC-CO2 when analyzing the impacts of various regulations.

This is the Phase 2 report. The Phase 1 report examined the advantages and challenges of potential approaches to a near-term narrow update to the SC-CO2.

Sponsors: Members of the Interagency Working Group on the Social Cost of Carbon, including the U.S. Department of Commerce, Department of Energy, Department of Interior, Department of Transportation, and the Environmental Protection Agency

Assessment of Approaches to Updating the Social Cost of Carbon: Phase 1 Report on a Near-Term UpdateThis report advises that there would not be sufficient benefit to updating estimates of the social cost of carbon (SCC) within a year based only on the revision of a specific parameter in the existing framework used by the government’s interagency group to measure the SCC. The committee considered whether a near-term change is warranted on the basis of updating the probability distribution for equilibrium climate sensitivity (ECS). Because ECS is only one input to the framework used to estimate the SCC, updating the ECS alone may not significantly improve the estimates. The report also recommends ways to change the IWG's technical support documents to enhance the qualitative characterization of uncertainties associated with the SCC estimates, which would increase the transparency of the estimates when used in regulatory impact analyses. Read or download this report